Thursday, November 19, 2015

Obamacare and the pursuit of the stationary state

I continue to be either amazed, or appalled (it depends on the situation and the commentator) at how many folks characterize what is happening as "unintended consequences" of Obamacare.

These are not unintended consequences. They were entirely foreseen and discussed from the moment they were first proposed, and the administration has gone along with it anyway.

One would have to be an idiot to have not foreseen that companies would do the sensible thing to do, and they are doing it. Since Barack Obama, and many of his advisors, are not idiots, but rather are fairly intelligent and even cunning, one really can come to only one logical and rational conclusion.

These consequences of the Obamacare mandates are therefore intentional.

Their intentionality is consistent with Obama and his closest advisors desire to erode the economic foundations of this country, and corrode the social cohesion that has held this great nation together.

Liberals like Obama are not really concerned about the reality of Obamacare, they are only concerned about the public becoming aware of the reality. The liberal believes in John Stuart Mill's concept of the "stationary state" in which the economy does not grow so fast, but people also don't work so hard and we can get on with the "art of living" rather than the "art of making a living."

Mill, however, at least understood the lack of economic logic behind the socialist movement and argued that capitalism held out far more promise if some of its institutions were changed at the margin. The liberals today ignore economic forces, ignore the promise of markets and happily pursue the "stationary" state.

How else can one understand Obama's response to the late Tim Russet’s question during the primary in 2008 about the inverse relationship between capital gains taxes and capital gains revenue? Obama was surprised at the question, obviously didn’t know about the relationship and obviously didn't care, when he responded – higher capital gains taxes are "fairer."

This revealed more than anything what Obama is all about.

A warning – denying economic forces and incentives are like denying the power of the wind and the tides – you will do so at your prevail. Case in point – Obamacare – the modern Titanic. Watch how the liberals will scramble to keep it a foot and shift focus to "making it better" as more "takers" become dependent on the system. It will end in disaster much like the Titanic!

Great economic and political distress is imposed on society as Obama and the left listen to the voices of some socialist utopian in the past. They have become the "madmen in authority" per Keynes.

On the face of things, the entitled vastly outnumber the generators of wealth, and that bodes very darkly for America's future, especially given Obama's belief in big government solutions. Obama exploits this by using this simple statistical fact: those of us who provide jobs and prosperity are outnumbered by those who use our democratic system to extract unearned wealth from others for their own personal gain.

In other words, people voting for candidates who promise them more government programs that transfer wealth from the pocket of one person to their own pocket is Obama's source of political power. So we in the minority who generate wealth must capitulate, or fight back at the ballot box.

My proof of argument comes from Obama's great intellectual shortfall. That is Obama's expressed belief that the American economy is robust enough to shoulder the burden of all of his laws, programs and upcoming regulations, not to mention his presidential decrees. But human psychology is something that Obama does not understand, nor take into account beyond his endless campaign rhetoric formulated to appeal to class envy and personal greed.

The modus operandi of Obama and his minions is to push business people into a corner through an onslaught of new regulations and laws. But eventually, many business people will give up or cut-and-run when they feel they are backed into a corner. And that facet of psychology is something that Obama does not take into account.

Obama objectivizes business people as emotionless automatons that equate to mere statistics to be manipulated. And that's where he's wrong.

There is a strange dichotomy in the mind of the liberal. On the one hand, a behavior that is considered bad or undesirable can be modified via legislation, regulation and taxation. Smoking, for example. They raise cigarette taxes because they want to discourage smoking (ignore the more cynical reason for the moment).

But, on the other hand, there's an expectation that many other behaviors won't be modified via legislation, regulation and taxation. Suggesting that raising taxes on the rich will cause them to change behavior and pursue more tax avoidance is met with derision, dismissal, scorn and personal attacks. Yet that's exactly what has happened throughout history.

And so we witness behavior modification in response to the new Obamacare rules. What's the response? The firms that speak openly about it are protested and castigated. Why? Are the liberals surprised? Is there anything in history that suggests this wouldn't be the case? Isn't it a given that people will assess a rule set and figure out how to fend for themselves within it?

The left wants everyone whose wealth is being redistributed to be happy about it, to embrace the forced "sharing," and to be good little sheep. It's utterly contrary to human nature, of course, and thus it doesn't happen and never will happen. It's why socialism and communism have failed, time and again.

A number of years ago when last the socialists where in power in France they passed a law which the French call le trente-cinq this law reduced the maximum workweek from 40 to 35 hours (at no reduction in pay) the PS (Parti Socialiste) trumpeted this as a law which would create jobs. Their logic being that businesses, especially small local businesses which need every employee hour they can get would now hire additional employees to fill the hours their current employees would no longer work.

Of course, French business people are no different from American business people and it didn't happen. Small local businesses such as the local boulangerie at which getting one's fresh baguette every morning is the heart and soul of French culture just closed shop one or two days a week.

Except for perhaps the French unions (which represent about 10% of the workforce) the majority of the French hate the trente-cinq however the PS consider it their crowning achievement (despite the fact it did not create more jobs) and will defend it to the death.

The point here for the U.S. is the liberals consider Obamacare their crowning achievement and even if it results in 29 hour per week workers, companies eliminating employees, and barely moves the needle on the number of Americans covered by Health Insurance (from the pre-passage 86% which is a pretty good number, no?). Liberals will defend Obamacare to the end.

For various reasons, employment in the U.S. for a long time has been moving away from full-time 40 hours/week with benefits to a contractor model. It's simply too expensive to keep and maintain full-time employees; the government has made sure of that. It's easier, cheaper, and more flexible to draw from a pool of contractors as needed.

Obamacare merely pushes us more in this direction. What Obama and the liberals call the social contract between business and society is rapidly disappearing, as society demands more and more from businesses, and businesses respond by shrinking themselves and moving overseas.

I don't see how our economy can continue to be the world's largest or set any kind of standards when we treat our most productive, wealth-producing sector as some kind of pariah and criminal class.

The only solution I can see on the horizon is to devolve more power to the states, and let the most successful states win. Already, we're seeing the failure of high-tax, high-union, anti-business states like California, New York, and Illinois, versus the comeback success of low-tax pro-business states like Wisconsin and Texas. Even New Jersey is creeping into the comeback category.

Eventually it will be a core of successful states versus the corrupt, deadbeat states allied with the corrupt, bankrupt federal government. Not ideal but at least folks on the coasts will have a safe haven to flee to if they want jobs and a reasonable standard of living.